What is the Earned Income Credit (EIC)?
The Earned Income Credit (EIC) is available to qualifying low-income workers. Two factors determine the amount of an individual's EIC: the number of qualifying children and the individual's earned income. The credit is phased out when income exceeds specific thresholds. Here are the maximum credits and phase-out thresholds for 2007:
With no qualifying child: the maximum Earned Income Credit amount is $412. The credit is progressively phased out and earned income and adjusted gross income (AGI) must each be less than $12,590 ($14,590 for married filing jointly).
With one qualifying child: the maximum Earned Income Credit amount is $2,747. The credit is progressively phased out and earned income and adjusted gross income (AGI) must each be less than $33,241 ($35,241 for married filing jointly).
With two or more qualifying children: the maximum Earned Income Credit amount is $4,536. The credit is progressively phased out and earned income and adjusted gross income (AGI) must be less than $37,783 ($39,783 for married filing jointly).